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Plans to keep highway aid flowing to states advance in House, Senate as deadline looms

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WASHINGTON - House and Senate committees took steps Thursday toward keeping highway and transit aid flowing to states just three weeks before the government says it will have to slow down payments.

The House Ways and Means Committee approved on a voice vote a bill by its chairman, Rep. Dave Camp, R-Mich., that cobbles together $11 billion in pension tax changes, customs fees and money from a fund to repair leaking underground fuel storage tanks to shore up the federal Highway Trust Fund through May 2015.

In the Senate, the Finance Committee, also on a voice vote, approved a compromise worked out between the committee's chairman, Sen. Ron Wyden, D-Ore., and its senior Republican, Sen. Orrin Hatch of Utah. The Senate bill looks much like the House bill except it relies less on pension tax changes for revenue and more on steps to ensure the earned income and child tax credits and mortgage deductions are being used only by people who qualify for them, among other tax changes.

Transportation Secretary Anthony Foxx has warned that by the first week in August the fund will no longer have enough money to cover promised aid to states, and the government will begin to stretch out payments. States have been told to expect a 28 per cent reduction in aid on average. The fund is expected to reach a zero balance by the end of August. Some states have already begun to delay or cancel construction project due to the uncertainty of federal aid.

House Democrats criticized the Camp plan, saying it allows Congress to put off finding a long-term solution to the chronic money shortage that has kept transportation programs teetering on the edge of insolvency since 2008.

An amendment by Rep. Earl Blumenauer, D-Ore., that would have committed Congress to passing a six-year transportation bill before the end of this year was defeated along party lines.

"It is a mistake to take the pressure off this Congress and kick it down the road," Blumenauer said. Congress will likely have more difficulty reaching an agreement on a long-term plan next year in the partisan atmosphere of a presidential campaign, he said.

But Republicans said more time is needed to reach a long-term solution. "A funding package that just goes to the end of 2014 would only create a larger crisis in December," Camp said.

House Speaker John Boehner, R-Ohio, told reporters he intends to bring the bill up for a vote next week.

Some GOP conservatives oppose transferring money from the general treasury to transportation programs, saying they want to limit highway and transit spending to money raised by federal gasoline and diesel taxes. The fuel taxes are the Highway Trust Fund's main revenue source, but they haven't been raised in 21 years and aren't keeping pace with spending. Dan Holler, a spokesman for Heritage Action for America, which is influential with conservatives, called the Camp bill a "spend now, pay later" plan.

Democrats and at least one Senate Republican, Bob Corker of Tennessee, have also criticized the bill for paying for less than a year's worth of transportation spending with revenue that is expected to be collected over the next 10 years.

The Senate bill also provides $11 billion, enough to continue programs through next May. Wyden said he favours keeping the pressure on Congress to pass a long-term bill this year, but agreed to provide more money at Hatch's insistence in order to gain Republican support for the measure.

An amendment by Sen. Tom Carper, D-Del., to reduce the funding to $8 billion — enough to keep transportation programs going at current spending levels through Dec. 31 — was defeated by on a 14-10 vote. Most committee Democrats supported Carper, but several joined Wyden in voting against the amendment. Most of committee Republicans opposed the amendment, but three GOP senators — Michael Crapo of Idaho, Michael Enzi of Wyoming and Rob Portman of Ohio — voted with Carper.

Afterward, Wyden said he planned to get to work with Carper on a longer-term bill.

"This is front and centre on my agenda," he said in an interview.

White House and transportation interest groups, including state and local officials, construction-related industries, transit agencies, labour unions and businesses that say the nation's aging infrastructure is hindering their products from getting to market and their employees from getting to work, also advocate keeping the pressure on Congress in an effort to get a long-term bill this year.

"Time is short and consequences of inaction are too high," Bruce Josten, the U.S. Chamber's chief lobbyist, said in a letter Thursday to Camp. "Congress must have - and seize - the opportunity to address a long-term revenue fix to the (trust fund) before year end."

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Follow Joan Lowy on Twitter at http://www.twitter.com/AP_Joan_Lowy

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